Italy’s short-term economic outlook is firm. Yet the country’s long-term growth outlook is weak. The next government is unlikely to tackle large challenges. On the upside, the risk of an unexperienced populist government after the 2018 elections is limited.

The separatists will likely win today’s elections in Catalonia, but they might lose their absolute majority. While a fresh push towards unilateral independence is unlikely, it could take many years before tensions actually recede.

After years of growth the Dutch economy has recovered from the crisis. The Netherlands will now enter the top of the economic cycle, with low unemployment and increasing inflation. The new coalition will further boost growth, which is unnecessary given the current phase of the economy.

The Dutch economy is performing well. Simultaneously, the impact of a geopolitical shock in the Middle East or Asia could be substantial. The risk of such an event can also affect growth; current economic growth could have been a half percent higher.

We have developed a two-equation model to forecast India’s interest rate and inflation. Going forward, we expect that both variables will follow an upward trajectory. In our lower bound forecasts, we are even more hawkish than the repo forecasts from a Bloomberg survey among 46 economists.

A two-equation forecasting model shows that we expect interest and inflation rates to increase in India. It might be worthwhile for the Reserve Bank of India to examine whether it is useful to communicate medium-term forecasts on these variables.

Simulations with a macro-econometric model show that a reduction in the US corporate tax rate will boost GDP growth in the short run, but the debt ratio in the long run. The cut will also lead to higher long-term interest rates and a stronger US dollar.

The breaking down of ‘Jamaica’-coalition talks last night brings unprecedented political uncertainty to Germany. Political initiative and control is moving away from Merkel towards the President, Frank-Walter Steinmeier, who can ultimately trigger new elections.